Validators are considered the backbone of the blockchain system. The distributed database contains information about all the operations that users perform on the blockchain. Validators are involved in confirming transactions – special verification nodes. The main function of the validator is confirmation of the next block in a distributed database. In other words, the node verifies the block has been added by matching information. In addition, they distribute staking bonuses, do statistics. This does not require super-powerful and productive computers, resource consumption is much lower than when mining.
The validator is automatically selected for each newly created block. Despite the random selection principle, there are certain criteria that affect the process:
- the lifetime of the node;
- technical condition of the node;
- the volume of digital assets in staking.
Principle – the more coins are blocked, the higher the priority of the validator. At the same time, malfunctions and problems in the work of the validator lead to penalties.
The profit is formed by paying for the main work, that is, confirmation of the newly created blocks. In addition, the validator receives a reward for issuing new tokens. The reward is paid in proportion to the stake in the total pool. At the same time, teams that use non-standard approaches to creating algorithms for rewarding and penalizing users receive more income. This attracts more users than the standard approach.
The validator purchases cryptocurrency and locks it in their wallet in a procedure called staking. Implemented a proof of stake (PoS) algorithm. Thanks to this, the validator gets the right to check the integrity of the blocks and performs other functions entrusted by the system.
Staking increases the stability and security of the blockchain. Main advantages:
- the time for checking new blocks is reduced;
- costs for protection against hacker attacks are lower;
- the asset withdrawal fee is lower.
- negative points of staking:
- income is highly dependent on the volume of blocked cryptocurrency, which requires large resources;
- not every crypto coin is suitable for making money on staking;
- for unstable networks with low capitalization, there is a risk of capturing 51% of the hash rate.
Blockchain protection from attacks
Each project uses its own algorithms and protection methods. In this case, validators are actively involved. They inform network developers about the state of blockchain blocks, provide other statistical data that help to timely identify and prevent an attack, and defend against it.
To protect against hacker attacks, validators, who are rivals in “peaceful” life, unite and cooperate in solving a common problem.
The second-generation Ethereum blockchain validators have certain limitations. Firstly, in order to become a validator, you need to block 32 ETH in your wallet, which is more than $ 100 thousand. Secondly, there are certain requirements for the computing power of the equipment. Otherwise, it will be difficult for the blockchain to ensure its performance and protection.
The official website of the ethereum.org project provides instructions for those who want to become an Ethereum 2.0 validator on their own:
- it is necessary to accept the terms of the network, to confirm the awareness of the risks;
- install software versions 1.0 and 2.0, following the instructions on the site to program the operation of the nodes;
- transfer 32 ethers to the address of the smart contract – it is important not to deviate from the instructions, otherwise, you can lose money.
It is difficult to start the work of the node on your own. You can use equipment that has already been configured in advance, contact intermediaries, special services. In this case, you will have to share part of the profit, pay remuneration to intermediaries.
The principle of “validator as a service” is also being actively promoted. The organization will operate the node for a fee. Such a move will suit large investors.
Special services offer joint staking, this is the most affordable option for a common user. To do this, you can participate in pools (profit depends on the share of investment in staking), use lending platforms and cryptocurrency exchanges with the corresponding function.